President of defunct Mercer County construction company gets 8 years in fraud

TRENTON — The president of a now-defunct Mercer County construction company was sentenced to eight years in state prison Wednesday for stealing a total of more than $450,000 by providing false and misleading information to its workers’ compensation carrier and failing to file tax returns or underreporting wages for his business and himself to the New Jersey Department of Treasury.

Herlindo Garcia-Merlos, 49, whose last known address was in Trenton, was sentenced to eight years in state prison by Superior Court Judge Gerald Council in Mercer County, Attorney General Jeffrey S. Chiesa said.

In addition, Garcia-Merlos was also ordered to pay $315,680 in restitution to New Jersey Manufacturers Insurance Group and $135,462 in restitution to the New Jersey Department of Treasury. On Nov. 28, Garcia-Merlos pleaded guilty to a criminal accusation charging him with two counts of second-degree theft by deception.

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“The lengthy prison sentence imposed upon this defendant should act as a strong deterrent to anyone who fails to provide adequate and lawful workers’ compensation insurance,” Attorney General Chiesa said. “Such frauds will not be tolerated and will be investigated and prosecuted to the fullest extent of the law.”

Garcia-Merlos was the president of the now-defunct Orients Construction Company, Inc. (Orients), located in Trenton. In March 2009, Garcia-Merlos ceased doing business as Orients and began doing business as Melrose Construction, Inc.

In pleading guilty, Garcia-Merlos admitted that, between February 2007 and April 2010, false and misleading information was provided to NJM Insurance Group. The investigation determined that the type of services rendered by Orients as well as the amount of payroll during the specified policy periods were not true. As a result of the fraud, Garcia-Merlos obtained reduced premiums that his company was not entitled to resulting in the premium difference of $315,680.